How Can Employees Increase Their PF Contributions Beyond 12%? Seeking Guidance on the Process

singhajoy17@gmail.com
Hi Sir,

If an employee wishes to contribute more (excess of 12%) amount in PF account, what is the procedure regarding this? Is there any form that needs to be submitted to the PF office? Please guide me as soon as possible.
abedeen7
Dear Ajoy,

An employee may contribute in excess of 12%, but the employer is not liable to contribute the same. I would request you to discuss this with your HR team along with an application. As per my knowledge, no such form is required.

Thank you.
rangaravi
An employee can contribute an additional 8% towards PF (Total Max 20%). This additional 8% will be credited to the PF account. There is no need to fill any specific form regarding this.

Thanks and Regards,

Ravindranath
sarisri7@gmail.com
Voluntary Provident Fund Contribution

When an employee wants to contribute more than the statutory PF (12%), they can do so, but under certain limitations. It may be up to 30% or 20%, which is purely at the employer's discretion. The extra contribution (more than 12%) is called VPF (Voluntary Provident Fund contribution), which can be exempted under IT section 80C, as most employees claim IT exemption by following the same practice. This not only exempts IT but also ensures an 8.78% interest annually. Please verify the exact percentage.

I hope I have made an attempt to clarify the situation.

Regards, Sarisri
sanjib_kjr
You have to request the RPFC of this area through the employer along with the consent of the employee. After getting approval, then you can contribute more. But one thing the employer is not liable to pay the contribution more than the prescribed limit, i.e., 12%.
saswatabanerjee
Can you please explain why the maximum contribution will be only 20%? Where is the clause or restriction? An employee can contribute an additional 8% towards PF (Total Max 20%). This additional 8% will be credited to the PF account. There is no need to fill any specific form regarding this.

Thanks and Regards,
Ravindranath
Posted 4th February 2016
Pan Singh
Voluntary Provident Fund (VPF) Contributions

As per my understanding, PF can be deducted up to 100% of the basic salary (of which 12% is compulsory for EPF, and the balance can be VPF).

Presently, I am deducting 36% (12% + 24%) of my basic salary. My HR informed me that there is a limitation on the interest over VPF (interest will be allowed only up to 20% VPF). However, I have checked and found that the EPFO provides the same interest on both EPF and VPF.

No doubt, VPF is currently a significant saving tool compared to others. EPF attracts good interest. The major point is that in other investments, if you break the premium/payment, the plan will reduce your "Return." In private sector jobs, uncertainty exists. If you take any big policy/investment plan and something adverse happens, and you find/feel you can’t continue it in your bad times, the policymaker takes advantage of your situation.

However, in EPF, you only have to contribute while you are employed, but this will help you in difficult times (if you are jobless and in need of money, you can withdraw the EPF). Though EPF is a retirement plan, we should not withdraw it unless it is absolutely necessary.

Regards
saswatabanerjee
Dear PAN Singh,

There is one restriction, though. The Payment of Wages Act does not allow total deductions to exceed 50% of gross wages. Therefore, your contribution can't exceed that amount, including deductions of EPFs, etc.

I would then suggest using PPF, which is similar but allows you to contribute up to ₹150,000 per year.
Sathish.podduturi
For VPF, no form is required to submit at EPF. However, the employer can contribute up to 12% only. This is applicable in India.
Dhamdhere Datta
I need one help from the HR team. I require VPF (Voluntary Provident Fund) provision in writing to present to the manager and implement for some employees.
sanjib_kjr
Your employer and you jointly write a letter to the PF Commissioner of your region. After receiving approval from the Commissioner, you may be able to deposit a higher PF amount (12% more); otherwise, not.
headclaims
Dear Sir/Madam,

Employees of my organization want to increase their EPF contribution, which means they are currently contributing 12% of ₹15,000, but they willingly want to contribute 50% of ₹15,000. Is there any provision in the Employees Provident Fund and Miscellaneous Act 1952? Please share the article number (if available) so that we can execute the necessary steps to provide a better saving scheme for the interested employees.
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